Geographical Indications, Property Rights, and Value-Added Agriculture

What do Vidalia onions, Wisconsin cheese, and Kona coffee have that feta cheese, champagne, and cognac do not? The first three products have trademark protection for their brand names (in this case, through U.S. trademark law). The latter three have no brand name protection, but that could change. Protection would become available for the latter products if E.U. proposals to increase protection for products identified as originating from a particular geographic region—so-called Geographical Indications (GIs)—are adopted. The European Union proposes to (1) establish a register of GIs that would give protection to products across international boundaries; (2) extend the protections that are enjoyed by wines and spirits to food products; and (3) allow E.U. member countries to retrieve or “claw back” GIs currently being used by other countries. The first 41 products with GIs that the European Union wants to protect are shown in the accompanying box. The E.U. proposal is strongly opposed by the United States, Australia, Canada, and other major food exporters. Furthermore, the United States and Australia believe that current E.U. domestic laws concerning GIs go too far. On October 2, the Dispute Settlement Body of the World Trade Organization agreed to look into European Community rules on trademarks and GIs at the request of the United States and Australia. The U.S. position seems to contradict the encouragement U.S. producers are getting from the U.S. Department of Agriculture to move away from production of homogeneous commodities toward production of value-added products that can increase returns. One feasible way to differentiate a product and add value to it is to brand it with the region from which it originated. Alaska fishermen are trying to do this by joining together to produce Copper River Salmon and Castle Cape Reds. Wisconsin milk producers have joined to create Wisconsin Real Cheese and Wisconsin Style Havarti. And many state departments of agriculture have created certification programs for products that originate in their states. Examples include A Taste of Iowa, Idaho Preferred, Fresh from Florida, Get Real Get Maine, and Maryland Seafood—It’s As Good as It Looks. Given that producers are showing increased interest in using GIs to create branded products, why has the United States opposed policy changes that would seem to strengthen their hand?